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On March 11, 2021, Nokia announced that it has signed a patent license agreement with Samsung, which covers the use of Nokia’s innovations in video standards. Under the agreement, Samsung will make royalty payments to Nokia. The terms of the agreement remain confidential between the parties.
“The telecommunications companies are typically very sophisticated when it comes to patents, which is due in part to the need for their equipment to comply with standards. As a result, their engineers and designers are often involved with standards-setting organizations, which may impose a requirement for participating companies to agree to make their standards-essential patents available for licensing on fair, reasonable and non-discriminatory terms and conditions,” says Christopher Rourk, a partner at Jackson Walker in Dallas. “While the standards-setting organizations are not typically involved with enforcing such FRAND obligations, courts will often apply standards-related licensing conditions when they adjudicate standards-related patent disputes, so the companies that participate in developing the standards are usually careful to ensure that they have identified all of their patents that are essential to using any standard. By doing so, those companies can maximize their standards-related licensing revenue and avoid litigating patents that are subject to FRAND terms but which were not properly identified as such.”
“The license agreement between Nokia and Samsung is reported to relate to such standards-essential patents for 5G and to be offered in accordance with FRAND terms and conditions, but the current situation with 5G standards is more complicated than with older standards because there is presently not a single patent pool for 5G standards (unlike many older standards),” Rourk says. “There are also a large number of 5G standards – for example, a document from the Institute of Electrical and Electronics Engineers (IEEE) at https://standards.ieee.org/content/dam/ieee-standards/standards/web/documents/other/5G.pdf lists over 70 IEEE standards or draft standards that are associated with 5G. These standards and draft standards involve many different technologies, such as mobile broadband network evolution, technology interoperability, the Internet of Things and connected vehicles. The companies that implement 5G products and systems will likely use systems and components from different providers, but those systems and components might not be licensed under all different 5G-related standards.”
While Nokia and Samsung are now in harmony, there is no guarantee that a breach of contract will never happen in the future as companies often file for “divorce!”
“There have been a large number of patent licensing disputes involving both SEPs and other patents around the world. In the US, it is common to include mediation provisions in patent licensing agreements to avoid litigation, which makes it more difficult to determine how extensive the instances of breach of contract are for patent licensing agreements between companies. However, even with such mediation provisions, there is still a large body of case law in the US dealing with breach of patent license contract issues and also with patent issues arising from breach of patent license contracts, such as infringement and validity,” Rourk says. “It is noted that many companies have sold patents to patent assertion entities that were contributed to standards-related patent pools or that have otherwise been licensed, so it is important to investigate whether a patent that is being asserted by a patent assertion entity has already been licensed to an accused infringer or the supplier of a component in an accused infringing system as part of a FRAND license, or if it is otherwise subject to FRAND obligations because it is standards essential and was obtained by a company that was involved with the adoption of the standard. Identification of licenses can result in the prompt resolution of any such litigation.”
In a truly unprecedented year for all, which IP fi...
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